Lottery agency hit by whistle-blower suit Ex-employee says his report on system's problems led to firing.

By Claire Osborn
AMERICAN-STATESMAN
Monday, February 06, 2006

A former Texas Lottery Commission worker has filed a whistle-blower lawsuit against the agency, saying he was fired for telling state legislators that the agency's emergency backup center doesn't work.

Shelton Charles also told legislators that the commission was trying to discourage the public from examining agency records by charging too much to release those records, according to the lawsuit.

A lottery spokesman said Monday that the agency cannot comment on pending litigation.

Charles' lawsuit was the second filed last week against the lottery commission by a former employee. Former administrative assistant Cynthia Suarez, who is Hispanic, filed a lawsuit Jan. 31 saying she was fired because of racial discrimination.

Charles' lawsuit also says there is ongoing racial discrimination by the agency, accusing it of paying lower salaries to minorities and passing them over for promotions.

If the agency acted improperly, Charles' lawsuit puts the lottery commission in a precarious position, said Dawn Nettles, a lottery watchdog whose online site is called the Lotto Report.

"The Texas Lottery will get crucified no matter which way it goes," she said.

If the commission refuses to settle the lawsuit, then Charles' lawyers will have access to agency records, Nettles said. That "will hurt" because Charles knows exactly which records to tell his lawyers to request to prove his points, Nettles said.

If the commission settles, then members of the Texas Legislature will wonder if agency officials were lying to them when they previously testified, according to the lawsuit, that the emergency preparedness center, designed to provide backup records in case the primary computer network shuts down, was working, Nettles said.

Charles, who is African American, first became concerned about his job after he sent an e-mail to the commission's executive director Oct. 26, 2005, saying there was racial discrimination at the agency against himself and other minority employees, the lawsuit said.

He never got a response, the lawsuit said.

Charles, a systems analyst, and other employees previously had told their managers that the agency's backup center would not work, the lawsuit said.

"Mr. Charles and the other employees were threatened with their jobs if they revealed this information to anyone," the lawsuit said.

Charles also had attended meetings at the lottery commission whose main topic of discussion was "setting costs at a false high amount in response to Open Records Requests in an effort to avoid having to produce the documentation," the lawsuit said.

He sent an e-mail Nov. 2, 2005, to members of the Texas Legislature detailing his concerns, the lawsuit said.

Two days later, the commission's acting director fired him, saying Charles had refused to answer questions from his supervisor about the e-mail to the legislators, the lawsuit said.

"The reason given for Mr. Charles' termination was clearly false as Mr. Charles never refused to answer questions but simply asked that the questions be put in writing," the lawsuit said.

The House Licensing and Administrative Procedures Committee, which oversees the commission, is investigating Charles' claims.

AUSTIN - A former Texas Lottery systems analyst, fired the same day he criticized the lottery in a Houston Chronicle article, filed a whistle-blower lawsuit Thursday, accusing the $3.5 billion agency of misusing government funds, misleading the Legislature and violating Texas' open records laws.

The accusations mirror those Shelton Charles made in the November Chronicle story and in an e-mail he sent to lawmakers two days before he was fired.

Charles, who is black, also had complained of racial discrimination a week before he was fired, the lawsuit states.

Charles is the second former lottery employee to sue the agency this week.

Cynthia Suarez, a former administrative assistant, also mentioned discriminatory treatment at the agency in her lawsuit.

A lottery spokeswoman declined to comment on Charles' accusations Thursday because they involved pending litigation. Gary Grief, the lottery's acting director at the time of Charles' firing, also was named in the lawsuit.

Rep. Kino Flores, D-Palmview, who chairs a lottery oversight committee that held a hearing on Charles' claims, hopes the lawsuit can provide Charles the answers he did not get from the legislative hearing, Flores' chief-of-staff, Ruben Longoria, said Thursday.

Longoria said the committee still is looking into Charles' claims and that the state auditor's office is conducting audits on several aspects of the lottery, including its human resources practices and security.

Before Charles was fired, his lawsuit states, he told his managers of his concerns that the lottery's emergency control center didn't work, which was contrary to what lottery officials had told lawmakers.

Charles and other employees who voiced similar concerns about the Disaster Recovery Site were "threatened with their jobs if they revealed this information to anyone," the lawsuit states.

Charles also claims that he witnessed lottery officials violating Texas' open records laws by "intentionally inflating the costs of obtaining public information."

Charles claims he sat in on meetings where "the main topic of discussion was setting costs at a false high amount" in an effort to deter requests.

The day Charles was fired, he was questioned by his supervisor and a human resources officer about his concerns over the Disaster Recovery Site, the lawsuit states. When Charles asked for the questions in writing, he claims in the lawsuit that his questioners agreed.

Former Texas Lottery Commission employee, Shelton Charles, is filing a civil lawsuit today in Travis County District Court in Austin, Texas, alleging violations of the Texas Whistleblower Act and other violations of law by top Commission employees.

The suit alleges that the Lottery Commission misused government funds and made material misrepresentations to the Texas Legislature regarding the Lottery Commission's Disaster Recovery Site.

Additionally, the suit alleges that the Lottery Commission has violated the Texas Open Records Act/Public Information Act by intentionally inflating the costs of obtaining public information in response to Open Records Requests from the media and public citizens.

Two days after Mr. Charles sent an email to members of the Texas Legislature addressing his concerns about the Lottery Commission, and approximately one week after Mr. Charles complained of racial discrimination at the Lottery Commission, the Lottery Commission terminated Mr. Charles' employment for alleged insubordination. Mr. Charles' suit alleges that the Lottery Commission's claim of insubordination was blatantly false and that the true reason for his termination was retaliation for reporting the Lottery Commission's illegal activities and for exercising his First Amendment right of free speech.

Derek A. Howard and Robert W. Schmidt are the attorneys for the Plaintiff. A copy of the suit is attached. For more information, contact Mr. Howard or Mr. Schmidt at 512-480-9300.

Two Stories As They Appear In
the Houston Chronicle & SA Express NewsLottery enlists help from outsiders by Lisa FalkenbergThere's still a chance for Lottery to lose even
more credibility by Ken Rodriguez
(Posted 7/23/05) Click here